Intrapreneurs are often glad to have the technical and marketing infrastructure of a large company at their disposal.

It’s vitally important not only to make room for intrapreneurs in your organization but also to provide incentives for them to stay, including a well-defined career path.

Intrapreneurs, however, tend to be mavericks whose philosophies and ideas are at odds with those of the organization–they often quit to form their own businesses and take their ideas and innovative cohorts with them.

A classic case of an intrapreneurship effort that didn’t work out is that of the founders of Adobe Systems, John Warnock and Charles Geschke. They believed that their new product ideas were not encouraged by their former employer and left in the 1980s to form their own business. Today, Adobe has annual revenues of more than US$3 billion.

This is why it’s vitally important not only to make room for intrapreneurs in your organization but also to provide incentives for them to stay, including a well-defined career path.

In fact, new research into intrapreneurship suggests that “companies fundamentally mismanage their innovation talent,” in the view of scholars Gina Colarelli O’Connor, Andrew Corbett and Ron Pierantozzi.

Managing talent

“Although there are plenty of great jobs in innovation, there are no careers,” they write in a Harvard Business Review article. “One member of an innovation hub in a large consumer products company explains, 'I could help launch $4, $5, $6 billion businesses over the next five years, and I won’t get promoted into leadership for this company.’”

According to Pierantozzi, an adjunct lecturer at The Wharton School and principal at Cameron and Associates LLP, an innovation consulting firm in Philadelphia, the whole notion of a career path is inherently problematic for innovative people.

“Let’s say you’re really good at exploring the frontiers of business, technology, whatever — you’re looking for the next big thing,” he says. “You nurture it until it’s spun off. The only reward you get is to run the company, to become a general manager. But the people who excel at discovering and incubating new opportunity don’t want to be general managers. What’s more, they often lack the skills to do it well.”

Pierantozzi says that this was a problem 25 years ago, when he was a young scientist. Some scientists want to be technical experts and inventors, but not managers.

In response, companies that employed scientists created what they called “technical ladders,” career paths that allowed technical people to do what they did best, while enabling scientists with managerial ambitions to take on administrative roles. He believes companies should do something similar for innovators.

Reward intrapreneurs

Rewards are also an effective way to go. 3M offers intrapreneurs awards for marketing excellence for reaching US$2 million in new product sales in the US or US$4 million worldwide, and another award for technical innovation.

Recipients are regarded as “corporate scientists,” and there is no management intervention in the award decision. In addition, intrapreneurs can join technological or R&D forums where membership is a source of pride because it is by invitation only.

Participants also must sign a confidentiality agreement and attend a course on intellectual property rights before being admitted.

Don’t leave it to luck

Can innovation be turned into a business function, like Marketing, Finance or HR?

It can and it should, according to management professor Gina Colarelli O’Connor, Faculty Director of the Severino Center for Technological Entrepreneurship at the Rensselaer Polytechnic Institute.

“To get breakthrough innovation, where there is a lot of risk and uncertainty and the organization is being asked to change its behavior across many dimensions, you have to institutionalize innovation,” says O’Connor.

To do so, companies need the right processes, metrics, talent management and governance — all of which, O’Connor says, differ markedly from those used in traditional management. For example, processes for achieving breakthrough innovation encourage companies to experiment and change direction.

It’s also helpful to use activity-based metrics that are linked to innovation rather than outcomes, because they reflect the inherently experimental nature of the process.

“Managers see innovation as being about making exceptions to how they normally do things, and about breaking the rules, but I don’t think that’s a winning approach,” O’Connor says. “Innovation is a management discipline.”

We should be teaching it in MBA programs. It can’t be an exception, but instead must become part of how companies do business. It is a function that is missing in most companies.”

Connect with us

Stay connected with us through social media, email alerts or webcasts. Or download our EY Insights app for mobile devices.

Feedback

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.